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The Future of United Airlines Rests in the Hands of Congress

Date: October 5, 2022

Matthew Klint - Live and Let's Fly

As Congress Considers Whether to Cut Boeing Slack, United Airlines Anxiously Waits

United Airlines has staked the next five years on United Next, its plan to add 500 new planes to its fleet at a rate of over 100 per year. United says this will transform its fleet into a modern, fuel-efficient workhorse, with CEO Scott Kirby adding:

“If we’re successful bringing these 500 airplanes onboard, we are so far ahead of any of our competitors that there’s really no way that anyone can catch up to us.”

While that remains to be seen, the very prospect of adding so many new aircraft, at least as planned, is currently in jeopardy thanks to delays in the certification of the Boeing 737 MAX 10.

Congress mandated in 2020, in the wake 737 MAX crashes in Ethiopia and Indonesia, that any aircraft certified in 2023 or later have new (and arguably redundant) cockpit alerts to better protect against unnecessary tragedy.

But Boeing has not received regulatory approval for its 737 MAX 10 (with over 700 orders) or its 737 MAX 7 and the year is quickly winding down. Thus, Boeing is aggressively making a dual effort to further delay the implementation of the new cockpit safety requirements while at the same time trying to obtain approval for its new variants before the end of 2022.

Senator Roger Wicker (R-MS) has proposed a two-year extension and will try to add it to an omnibus defense bill, but it is not clear if that is a winning strategy.

Meanwhile, the Federal Aviation Administration has complained that Boeing has been late to submit paperwork, further delaying the process.

United Airlines is the YoYo Between Boeing And Congress

This brings us to United Airlines. The Chicago-based carrier has ordered 232 737 MAX 10, including 52 in a premium configuration and 182 in a denser domestic configuration. United’s fleet renewal plan, growth plan, and network plan all rest upon the delivery of this aircraft in a timely manner.

I tend to think that Congress will roll over and give Boeing more time (and frankly it isn’t clear to me if these extra cockpit protections are even necessary in the first place), but if not we might see a very different future for United Airlines.

Of course, the carrier proved to be extremely nimble and resilient in adjusting schedules based on demand during the pandemic. Kirby and his team also wisely did not retire aircraft as American and Delta did.

United will still be okay if Congress insists that Boeing proceed with these additional protections. But United will look different. It will be smaller. We will see older aircraft stick around longer (and perhaps not be retrofitted). Boeing is certainly just bluffing when it threatens to kill the Max 10 program, but further delays in certification may well change the nature of United’s growth plan for many years to come.

Airbus Wildcard?

Of course, all of this is music in the ears of Airbus. United has 70 Airbus A321neo on order (the A350 is still on order too). It is not clear if Airbus would be able to step in if Boeing falters, but I bet it would certainly try in pushing variants of its A32o family as a viable alternative to the 737 MAX 10.

Conclusion

As Boeing wrangles with lawmakers and regulators over the certification of its MAX 7 and MAX 10 aircraft, United Airlines stands waiting. We saw how 787 delivery days so adversely impacted American Airlines over the last year and we may see Boeing’s failure to deliver on a far larger scale if certification delays effectively torpedo United Next.

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